In one of its wildest and weirdest stretches ever, Wall Street entered a weekend awaiting a government bailout of Lehman Brothers Holdings Inc. (LEH) and exited with Merrill Lynch & Co. Inc. (MER) agreeing to sell itself to Bank of America Corp. (BAC) for nearly $50 billion – and Lehman announcing it will seek bankruptcy in a bid to avoid a total liquidation after it was unable to find a buyer. Read the rest of this entry »

The Rand continues to slide and today it reached its lowest level in five years against the US dollar. Why is the Rand tumbling you may ask; It is really more of the US dollar gaining strength due to commodity prices dropping amid a rise in global risk aversion. The stronger the US dollar gets, the weaker the Rand as going to be against the greenback. 

By 16:00 the Rand was bid at R8.3010/$ from a previous close of R8.1883 after earlier hitting R8.35 its worst level since May 2003. It was bid at R11.5562/€ from a previous R11.4316 and at R14.5789/£ from R14.3308 before.

As Zimbabweans continue to wait for a political solution to the country, the economy continues to sink deeper into the ground. On many occassions, people have said that the Zimbabwe economy has hit rock bottom but it seems like there is a level lower than ‘rock bottom’ and the Zimbabwe economy continues to sink to that level. How the Zimbabwe economy has managed to survive this long remains a mystery to many. On Wednesday (10 September), the Reserve Bank in Zimbabwe started to allow shops to sell goods in foreign currency to help ease shortages, the clearest sign authorities are losing the battle against a thriving black market. Central bank Governor Gideon Gono said 1 000 retailers and 200 wholesalers will be allowed to sell in foreign money, while motorists could also buy fuel in foreign currency. Read the rest of this entry »

Despite earlier pledges to hold oil output steady, the Organization of Petroleum Exporting Countries (OPEC) yesterday (Wednesday) announced that it would cut production by 520,000 barrels per day in an effort to “strictly comply” with the production quotas set last September. However, Saudi Arabia, the cartel’s largest and most influential member has indicated otherwise.

The cartel, which controls 40% of the world’s oil exports, pointed to such factors as tumbling demand, greater supply, the dollar’s recent rally and an easing of political tensions - all of which have contributed to a 30% drop in oil prices over the past nine weeks. Read the rest of this entry »

The JSE had a technical glitch again yesterday (Monday 8 September). This is the second time in less than two months that trade has halted on the JSE; on July 14, the bourse failed to open on time when a network glitch stopped public data about the equities markets from reaching all its customers. Yesterdays error was blamed on the London Stock Exchange (LSE). A technical glitch hit the London Stock Exchange, the platform from which the Johannesburg Securities Exchange (JSE) trades went offline, affecting all trade of local equities, single-stock futures and associated instruments.

This glitch yesterday left traders seething as they missed out on cashing in as the markets were expecting a good rebound. Looking at potential losses; a broker has estimated that the stock broking community has lost about R100m in commissions based on the R15bn turnover that was meant to be expected whilst the exchange was down.

In the world of technology we live in today, such occurrences as yesterdays do happen but one has to weigh in the cost of some errors occurring. What is worrying is that, this is the second time this has happened in a short amount of time. Hopefully this does not become a trend with the JSE as it was set a bad example.

Want to know what the price of a barrel of oil will be in eight years?

Exactly $119.50 a barrel.

There’s no shortage of pundits predicting where oil prices are heading. And every day seems to bring new reasons to change the forecast – a resurgent dollar, Americans curtailing their driving habits, oil supply reports… The list goes on.

But the guys who really know the future of oil prices are those sitting right in the driver’s seat – oil producers.

Every day, they make bets about the direction of petro prices on the futures market. And right now, they’re telling you – in no uncertain terms – oil’s got a floor price of $100 a barrel for years to come. Read the rest of this entry »

Some relief is on the way. Fuel prices will drop for a second consecutive month at midnight tonight. The Minerals and Energy Department made the announcement last Friday that the retail price of petrol will drop by between 69 and 78 cents per litre. The wholesale price of diesel with 0.05% sulphur content will drop by R1.44 per litre. Diesel with 0.005% sulphur content would drop by R1.46 per litre. This comes as a huge relief to consumers who had been battling with the increased fuel prices a couple of months ago.

The wholesale price of illuminating paraffin will drop by R1.46 a litre and the single maximum national retail price for illuminating paraffin by R1.94 a litre. This is also much welcome for consumers of paraffin who were not happy that the price of paraffin did not drop when the petrol and diesel prices last dropped.

It is now a matter of waiting to see if the fuel prices continue to drop. The drop has been attributed to the strengthening rand and the softening world oil prices. But with the hurricane season approaching it will be interesting to see how oil prices react. We may see oil prices rising due to decreased supply because of the hurricanes.